UK DIY News

Tesco unveils half year profits of £1.8bn

The world's third biggest retailer said the rise in underlying pre-tax profits came despite "modest" UK sales growth.

Sales across the group climbed by more than 8% to £32.9bn in the 26 weeks to August 28, Tesco said.In the UK, like-for-like sales - a key measure which excludes stores not open a year ago - barely grew, but combined with a solid performance of new stores, overall UK sales were up by more than 3%.

Growth was constrained by higher fuel costs as customers spent more at the pump instead of in store, and due to low food inflation.

Outgoing chief executive Sir Terry Leahy said the retailer - which intends to create 9,000 jobs in the UK this year - was experiencing "the tailwinds of recovery".

Sir Terry, who is leaving the company after 14 years at the helm, said: "There are plenty of challenges ahead but lots of opportunities to build on as well." Asked about his outlook for the economy, he said: "I don't think there'll be a double dip. "It'll be slow and steady in the UK, that's true, because we've got to rebalance the economy, but we'll be helped by growth in the global economy."He said Tesco's diversification - moving beyond groceries retail to provide other products such as financial services - was a "good example" for other businesses.

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